For the past two months, stocks, precious metals, bonds, and cryptocurrencies have all seemed to fall at the same time. Today, however, and perhaps throughout the week, there may be an attempt to break the bad run in many of the markets mentioned above.
The Dow Jones Industrial Average index has fallen for eight weeks in a row, something that previously happened in 1923, a few years before the Great Depression occurred in the United States - the most significant economic crisis of the century. Some market observers say that now, nearly 100 years later, history may be repeating itself, and the bear market is just beginning. The S&P 500 and Nasdaq 100 indexes have fallen for seven weeks in a row, which was the longest series since 2001. Technically, the U.S. indexes, having fallen more than 20 percent from their peaks, may already be in a bear market.
However, there are indications that a turnaround may be underway. Investors may have already discounted the U.S. interest rate hike cycle, assuming that the Fed will raise interest rates to 3.00-3.25 percent within a year. Yields on 10-year U.S. Treasury bonds have already peaked in that area, at one point exceeding 3.10 percent, while on Monday their rate fell to 2.80 percent. The lower U.S. bond yields, the more attractive stocks, and other risky assets can be, including precious metals like gold and silver.
This week, the minutes of the latest FOMC meeting will be released at 8 p.m. on Wednesday, May 25, which could give investors further clues about monetary policy in the U.S. and how to price the interest rate hike cycle further possibly. This could again impact many markets: from the US dollar to stock indices, precious metals, and cryptocurrencies.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
